Understanding Terms Before Contract Negotiation

Friend: "I got an amazing offer! CPO with 1% equity at the next unicorn!" Me: "Did you check the equity acceleration clauses?" Friend: "The what?" Me: "What happens to your equity if there's an acquisition?" Friend: "Um... I didn't ask about that" Me: "Do you have protection if they replace your role?" Friend: "I should probably review the offer letter again..." I've had this conversation with many execs last year, and here's the playbook I usually share. 1/ Your offer letter is more important than your base Not all equity is created equal: ↳ Standard 4-year vesting can be lost entirely in acquisition or a layoff ↳ No protection clauses can cost you $1m+ in a restructure ↳ Acceleration triggers make the difference between life-changing wealth and starting over (Share credit with Marc Baselga - follow him for product careers!) 2/ The hidden contract terms that matter The classic is "industry standard terms" Translation: "We hope you don't read the fine print" Senior leaders should never accept standard equity terms And most companies will adjust for candidates they want Always check the offer letter for: ↳ "What acceleration triggers are included?" ↳ "What happens if the company is acquired?" ↳ "What protections exist if my role changes?" ↳ "What protections exist if this doesn't work out in year 1?" You might have left a huge 7-figure public tech job to take a big bet. Don't be left with nothing. 3/ The protection terms worth fighting for Ask for: ↳ Single trigger acceleration (acquisition automatically vests equity) ↳ Double trigger protection (acquisition + role change vests equity) ↳ Extended exercise windows (years, not months) ↳ Severance tied to vesting schedule ↳ Change of control provisions 4/ Model the worst-case scenarios Don't just focus on the "we IPO at $10B" dream. Model out: ↳ Acquisition before cliff ↳ Restructuring after 1-2 years ↳ Management change ↳ Role elimination ↳ Board replacing the CEO 5/ Protect your downside before worrying about upside If you're negotiating as a senior leader, know that: ↳ Severance matters more than most realize ↳ 6-18 months is standard for VP+ roles ↳ Healthcare continuation should be included ↳ Equity acceleration is negotiable ↳ Reputation protection clauses can be added Pro tip: Have an employment attorney review your offer letter. The $1,000-2,000 cost is trivial compared to what you might lose. Especially if you're joining a pre-IPO company or potential acquisition target. The offer letter is a negotiable contract. It is also NEW INFORMATION. New information means you can reopen the discussion. But most candidates only negotiate the numbers, not the terms. Your job isn't just to maximize the headline figures. It's to protect yourself from the most likely negative outcomes. What equity protection clauses do you think matter most? Want the Executive Compensation Cheatsheet? https://lnkd.in/gdjEgGku

Law school never taught me how to amend a contract. As a construction lawyer who regularly works with 300+ page contracts, here's how I break it down for new lawyers: 1️⃣ Understand the intention of the clause Before drafting, ask what outcome you're trying to achieve with the amendments. It's tempting to just copy+paste precedent wording, but if you don't understand the goal, then you might miss the point. 2️⃣ Check the contract language Skim the definitions and some of the clauses in the contract. This way, you can pick up on the sentence structure, formatting, and terminology (e.g. 'Contractor' vs 'Supplier' / 'Principal' vs 'Client' / 'Works' vs 'Services'). 3️⃣ Mirror existing wording To make sure your new wording stays consistent with the broader contract, it’s helpful to take a quick look to see if there are similar obligations or entitlements already in the contract and how they’re drafted. For example, whenever I draft a new indemnity - I can see whether existing indemnities use wording like ‘arising out of or in connection with’ instead of ‘caused by’ as a starting point. Using the existing language avoids potential interpretation issues with differently drafted clauses, and can also be easier to accept in negotiations. 4️⃣ Put your new definitions in the right place If you’ve added new definitions, make sure they’re placed consistently with the existing definitions. For example, if there’s a definitions section - add yours there instead of floating in the body of the clause (or at least something like ‘Definition has the meaning given to that term in clause X’). 5️⃣ Follow the cross-referencing The changes you make to one part of the contract can have flow-on effects on other parts. Knowing every flow-on takes experience, but checking the cross-referred clauses (and ctrl+F the references to the clause you're amending) is something you can do straight away. This is also a good time to update and check that the automatic cross-referencing still work properly (F9 to update, and then search for "Error!" and "clause 0"). 6️⃣ Can you explain what you added? After all of that, the last check is whether you can explain the effect of your new drafting (and whether it aligns with the intention of the clause). Not only does this help with your personal skills development - it’s also handy (and probably necessary) for negotiations and keeping your client informed. ---- If you're a junior lawyer looking for practical career advice - check out the other free how-to guides on my website. You can also stay updated by sending a connection / follow. #lawyers #legalprofession #lawfirms #lawstudents

You might be making these common term sheet mistakes, and it could cost you your funding! While a term sheet isn’t legally binding, it’s a pivotal document that can significantly impact your business if you’re not careful. A term sheet is NOT a guarantee of funding. It’s just the beginning. The real negotiations happen when you sign the definitive agreements. Let’s break it down Confidentiality clause: Most term sheets include a legally binding confidentiality clause. Once signed, it restricts you from sharing any information about the terms with outsiders. Breaching this can lead to serious legal issues and harm your reputation. Exclusivity (No-shop clause): If this clause is in your term sheet, it locks you into negotiations with a current investor, preventing you from seeking better offers. While it shows commitment, it can limit your options, so tread carefully. Binding language: Be wary of sections that outline specific financial commitments or conditions. If you don’t meet these obligations, you could face legal consequences. For instance, if the term sheet specifies payment structures, failing to comply could lead to trouble. Negotiation terms: Pay close attention to pricing, repayment schedules, and timelines. These terms can become binding later, so make sure you fully understand what you’re agreeing to. Don't rush—review every clause, ask tough questions, and negotiate if something doesn’t sit right. Your startup's success depends on it!

You get some heavy markups back to your template from a potentially key client. You search for issues to concede so you can focus on the most important issues. You see they revised some boilerplate language at the end, such that their consent is required if you ever want to assign the contract. Seems completely reasonable, so you accept that change and move on to focus elsewhere. Depending on your company's situation, you may have just fallen into a #ContractTrap. Because an anti-assignment clause that doesn't have an exception for a merger, asset sale, or similar transaction means that if you ever want to sell your company, you may need the consent of the counterparty. And even if you have a reasonable relationship with them when you ask for the consent in the future, they'll know they have you over a barrel and may ask for concessions in return. What can you do to mitigate this risk? 🔹include an exception for strategic transactions including a merger, sale of substantially all of the assets, etc. 🔹clarify that consent must not be unreasonably withheld, delayed, or conditioned 🔹and of course explain your concerns when you're advocating for these changes. This may not be necessary in every contract. For contracts that can be terminated at any time or standard terms that are available to everyone aren't likely to be negotiated, for example, you don't need to push so hard. But for key, negotiated contracts with a set term for a key client/vendor? You definitely don't want to overlook the risk! #contracts #inhousecounsel

IF YOU SEE THESE WORDS IN A CONTRACT, CALL YOUR LAWYER IMMEDIATELY Business owners sign documents every day, but some agreements carry hidden consequences that can cost you ownership, revenue, or control. The danger is often not the clause itself but what it really means. Here are a few phrases that should make you pause. 1. Equity Contribution or Equity Participation: This sounds harmless, but it usually means you are giving away part of your company. Many founders don’t realise this until it is too late. 2. Joint Ownership of Assets or Intellectual Property: This can quietly transfer rights to your brand, client list, business processes, or IP. Joint ownership means permanent sharing, even after the relationship ends. 3. Authority to Bind the Company: If a non-director can sign or make commitments on your behalf, your company is at risk. This clause allows someone else to create obligations in your name. 4. Profit Sharing Across All Operations: Profit sharing should be clearly scoped and project-specific. When a contract says “across the business” or “in all operations,” it could entitle someone to your entire revenue stream. 5. Irrevocable Rights: Anything “irrevocable” deserves a second look. It usually means you cannot withdraw the permission, even if the relationship turns sour. 6. Exclusive Rights: Exclusivity without a timeline, territory, performance standard, or exit clause can trap you. You may end up unable to work with anyone else. 7. Sole Discretion: If the other party has power to decide everything “in their sole discretion,” you have no control over outcomes. 8. All Future Business or All Future Opportunities: This ties your future earnings to someone else. No founder should ever sign this. Every new opportunity deserves its own negotiation. 9. Without Further Compensation: This is a polite way of saying you will work for free later. Always clarify what work is included and what is not. 10. Hereby Assigns / Transfers: You must be sure what exactly is being transferred whether it is rights, clients, shares, IP, or money. One line can shift ownership without you noticing. Contracts are binding. What you sign today can strengthen your company or quietly dismantle it. If you come across any of these phrases, don’t rush. Pause. Ask questions. And please, call your lawyer. #iniirenepepple #BusinessAttorney #ContractReview #LegalForFounders #EntrepreneursGuide

What Can We Do to Help Athletes Be Better Prepared to Sign NIL Agreements? We see it almost every week now—same old story: * An athlete gets a #NIL deal offer. * Athlete only focuses on the dollar signs, not the fine print. * No adults guide the process. * No education on what to look out for. * Result? A total misunderstanding, and the athlete loses out. It’s frustrating, right? But it’s also preventable. Athletes and their families need to understand some key terms before signing any agreement. Here’s a quick guide to the most important things they should know: 1) Exclusivity Clauses – Does the agreement lock the athlete into promoting only one brand or product? This can limit future opportunities. 2) Group Licensing Terms – If part of a group deal, are the rights shared fairly? Athletes should know how revenue is split. 3) Payment Terms – When and how will the athlete get paid? Is it upfront, in installments, or based on performance? 4) Content Control, Ownership, and Approval – Who owns the content the athlete creates, and can they control how their name, image, or likeness is used? 5) Exit Clause – How can the athlete end the deal if things go south? It's important to have a clear exit strategy. Understanding these basics can protect athletes from losing out on great opportunities or getting trapped in bad deals. Now, here's the challenge: What other key points should athletes know before signing NIL agreements? Drop your ideas below, and let’s help create a smarter, more prepared generation of athletes! REAL NIL Education from The Players NIL